🔴Fear And Politics Moving European Markets (w/Dr. Irene Finel-Honigman)

I think one lesson is what happened right after breakfast was announced right after June 23rd 2016 where the immediate response was the Dow fell 600 points the pound suddenly looked like it was about to crash Everything looked like oh my god, we've hit, you know disaster again and after 48 hours have calmed down Do you see any evolution in the near term of this crisis whether it's a second referendum or a hard brexit or whatever that results in something like that any kind of real social violence even on the level of the Yellowjackets and well, you know I think this is something we have to be extremely careful about because What we did see with levy is wrong with the yellowed records in Paris was that one false move by President McComb of Announcing that he was raising gasoline taxes while at the same time pushing for massive investments and basically tax breaks for foreign Money and certainly for the owner of the corporate class in France Ignited this very sadly once it was ignited and then it's very often happened deteriorated into a complete basically movement of vandalism of violence which lost its its original purpose and cause Something like this can happen So the UK has to be very careful that politicians in the process of fighting their own little fights about brexit Do not in term ignite a genuine sense of outrage and anger and it's there to be ignited I mean You know these things It is there and it's there in every country and I think in Germany and again because of German history in part But uncle American is also had to be very very careful of exactly how she's Recalibrated and balanced the role of Germany particularly is presuming Lee the largest donor to all European bailouts etcetera with the needs of her country her constituency and Leaders are going to have to really watch out for that There's no question and that's why I mentioned that when we talk about the Russian influence It's very important to understand how deep this sense of disenfranchisement and Marginalization and discontent with basically regional and global entities is within countries themselves. Absolutely Ya know it's there. And yes, I think this is also one reason why The UK will have to be very careful whoever comes in to replace to resume and I think this is not going to be an easy job and Hopefully some solution is is found and I'm not sure Boris Johnson's the answer Yeah, you know it's very interesting that it's almost like the butterfly effect These little sparks can just ignite a conflagration and exactly, you know, the the whole Arab Spring was literally started by one Vendor who set himself on fire because he couldn't get his cart back after it had been Taken away from it and and the fire literally spread throughout the whole Of the region and and and so you do have this thing macron does one little thing that if he'd done it the week before Or if he'd done something different it might not have right Produced that at all, but you you can't really judge where those things are. It's it's it's not a predictable system. It's like a what they call a catastrophic system in Mathematics it it suddenly changes from one state to another without money without any real think so, you know I I do have that concern in the UK and and you just wonder if they if there was a for example a second Referendum and of course the question there is what would the question be on the second? Ah, that's a problem and I've heard all sorts of versions of that but if there were and one side or the other is obviously going to lose and and would that be a spark that would ignite this and how would you Control it. I remember There was a who was it that said that you know This was years ago And is the famous book and he said he described the British as having barely controlled anger, and I think that's true I think that is that is the curtain, you know What one doesn't want to reach is the point in which that's let loose well, I think this is the problem in Europe Also, you could almost go country by country in Europe this basically a simmering level of anger Against some of the political class against a political decision the sense that you still are basically being run by elites Making decisions that do not necessarily take you into account is running right now very deep. It's a sense of betrayal I think it is a betrayal and you know And we have to remember of course in European history is a long tradition of this the revolution of 1848 started this way, right? they've been other major revolutions and for friendly yes changes in Europe that start often exactly with that and so The point I always find fascinating with with a lot of European countries and in a way Maybe that's just go back to there almost deep and sometimes instinctive sense of their own history They often do have these sudden movements of rage and anger and yet somehow at the end They always seem particularly since the creation of the European Union to almost walk to the precipice and then walk back to somehow understand perhaps on a deeper level than we do in the states where we have not gone through what Europe has gone through That you don't want to get too close to the abyss. You kind of look over it exactly, and then you know Okay, and we have seen this already in Italy we have in many ways seen this in Greece We have seen this a number of country Certainly my call interestingly enough has tried to a little bit contain this by doing something typically French which years ago Me too haunted is appeal to the sense of the country appeal to the sense of patriotism that we're all in this together Yeah, well That's that Center that seems to be missing or or under so much stress and so Finn in so much of the world nowadays is everything is centrifugal forces forced everything to the sides and and one little Crisis and it's even force more to the side and it's really problematic going back to markets for a moment so if you know in the in the various evolutions of that that are from this point seem probable or likely, you know a Hard brexit, we hope won't happen a some kind of negotiated brexit Fading away of it. You know, it's just on hold indefinitely another referendum You see a temporary roiling in the markets in both Europe and the UK and probably globally but youth do you? Feel like people have already almost priced that in in a way and and so you don't see that this is gonna be the thing that precipitates a Serious global downturn there may be one for other reasons But I'm saying do you do you think that there's a risk or how high risk is there that this is? something that would precipitate a real serious issue long span long term Downturn of some kind or do you think it's it that it's it's already sort of in there in people's minds So whatever happens it it will there'll be this period where everybody has to Raise their hands up and scream about it, and then things will go back to normal Well, I think one lesson is what happened right after breakfast was announced right after June 23rd 2016 Where the immediate response was the Dow fell 600 points the pound suddenly looked like it was about to crash Everything looked like oh my god, we've hit, you know disaster again and after 48 hours have calmed down It began to calm down and everyone sort of stood back and said wait a minute the fundamentals in our economies are solid Nothing else has dramatically changed We are looking at one set of now major political changes and possible huge problems But fundamentally in an economic an economic standpoint. There hasn't been that much involved in this so far That's why I found it fascinating to what a point these little safety nets are being laid out in the regulatory Side and are basically being set out so that nothing is going to have to take place in absolute immediacy Neither the banks moving or getting the whole concept of bank of the backpass porting Privileges across Europe a banks being allowed to function each other's countries. This will continue basically quite a while There's a time to breathe. There's a lot of breathing space that is already built in this is already built in The fact that the pound is not done very well since brexit But it has not done dramatically badly either look for one point four to one point two hours, right? and and you know the the Example I use is during the absolute worst of the sovereign debt crises when everyone was thinking about oh, this is over Well, it turned out that the dollar euro parody never went ballistic. Yeah it remained Yes a little bit up a little bit down remain fairly solid Basically central bank reserves of 65 percent dollar and roughly 20 to 27 percent euro different shift You know, there's so many more larger global factors that we have already seen Do not necessarily get impacted by political decision and political crises I think that this may be part of it the problem is that Psychologically the perception of a sudden no deal Or everything just for maybe actually more severe that may be more damaging You know the sense of oh wait, man what now? Not necessarily market responses You

Channel: Real Vision

Views: 34,037

Keywords: Finance, Markets, Economy, Stock Market, Investing, Trading, Education, Financial Literacy, Recession, Interview, Conversation, Strategy, Insight, Analysis, Facts, Data, Fraud, Entertainment, Thesis, Short Seller, Real Vision, Equities, Technology, Financial System, Venture Capitalism, Innovation, Economic Disruption, Irene Finel-Honigman, Columbia University, Dee Smith, Strategic Insights Group, Brexit, UK, Yellow Jackets, Social Violence, Theresa May, European Union, Europe, Second Referendum Brexit

Id: fY_4m-s5gYM

Length: 10min 1sec (601 seconds)

Published: Wed Jul 31 2019